NEW YORK / ConSynSer / – US markets are heading into one of the busiest weeks of the earnings season, with three of the biggest names in the Magnificent 7 set to report quarterly results. Alphabet, Microsoft and Amazon will release figures as investors look for signs that heavy spending on artificial intelligence is turning into growth. The Federal Reserve also begins a two-day policy meeting on Tuesday, October 27. Its rate decision is due on Wednesday.
Wall Street will weigh the health of corporate earnings alongside the outlook for interest rates. Alphabet and Microsoft are scheduled to report after the market close on Wednesday, October 28. Amazon follows on Thursday, October 29. Cloud performance, AI monetization and capital expenditure will be among the key areas to watch. Investors want to know whether the current pace of AI investment can continue, and this week’s results should offer fresh clues.
According to Fiscal.ai data, Alphabet is expected to report earnings per share of $3 on revenue of $127.83 billion for the July-September quarter. Analysts expect Microsoft to post earnings per share of $4.72 on revenue of $90.75 billion. Amazon is forecast to report earnings per share of $1.96 on revenue of $202.2 billion. Intel is expected to report earnings per share of $0.40 on revenue of $16.47 billion.
Fed expected to hold rates steady
Several other major companies are also due to report this week. They include Robinhood Markets, Reddit, Boeing, T-Mobile US and Verizon Communications. Eli Lilly, Chevron, Exxon Mobil, PayPal, Corning and Rivian Automotive will release results as well. The Federal Open Market Committee is widely expected to keep its benchmark rate unchanged at 3.75% to 4%. CME FedWatch data show 90% odds that rates will stay on hold.
The central bank raised rates by a quarter point in September, lifting the target range to its current level. Fed Chair Kevin Warsh has declined to signal decisions for the Fed’s remaining meetings this year. Bond markets were little changed in late trading on Friday, October 23. The iShares 20+ Year Treasury Bond ETF slipped 0.05% after hours, and the iShares 7-10 Year Treasury Bond ETF edged down 0.04%.
PCE inflation data due Thursday
Investors will also watch the September Personal Consumption Expenditures report, due on Thursday. The PCE index is the Fed’s preferred inflation gauge. A Dow Jones estimate compiled by MarketWatch sees headline PCE rising 0.5% in September on a seasonally adjusted basis. Core PCE is expected to rise 0.3%. On an annual basis, PCE is forecast at 3.7%, with core PCE at 3.1%. The figures will show how price pressures are evolving.
Weekly jobless claims will be released the same morning. Initial claims fell to 194,000 in the latest week, near a 57-year low. In Friday’s after-hours session, the SPDR S&P 500 ETF gained 0.15%, the Invesco QQQ Trust rose 0.07% and the SPDR Dow Jones Industrial Average ETF added 0.13%. Retail sentiment on Stocktwits toward the S&P 500 ETF was extremely bearish. The Nasdaq posted its worst week since June in mid-October amid an AI selloff.